More people than ever before now need help with energy debts, water debts, telephone debts, council tax debts, and catalogue shopping debts, the charity warned.

The Money Advice Trust called the new debt landscape a situation that is ‘harder to resolve’ and with ‘no definitive solution’.

It warned that as interest rates start to rise, families on the financial brink could face even greater difficulties.

Recent inflation rises have been felt far more keenly by those on lower incomes than higher, while headline figures can hide the difficulties suffered by the poorest households.

Although inflation factors in rises to basic bills such as energy and food, these payments take up a considerably higher proportion of incomes for those on lower wages so they feel the effects of inflation more keenly.

Joanna Elson, Chief Executive of the Money Advice Trust said: ‘The gradual erosion of some families’ surplus income in the face of rising prices has led to a new generation of debt problems – one to which more people are vulnerable, one which is harder to resolve, and one which has no definitive solution.

Food, rent and energy costs take up a considerably higher proportion of income for those in the lower quintiles compared to those in the higher income quintiles (Source: Money Advice Trust)

‘We’re hearing from more people in serious debt difficulty as a result of debts totaling less than £5,000. When there is little room in a household budget to meet basic expenses, paying off debts can seem impossible.

‘With interest rates set to rise it is vital that we can help families on the financial brink. The impressive recovery of the broader economy should provide opportunities to help halt the rise of these debt problems.

'Recent Government announcement’s such as an increase in the minimum wage is a positive step towards helping these families, but more can be done.

‘The consumer credit market has a new
regulator in the Financial Conduct Authority. We hope its focus on the
consumer can help encourage financial products and services which meet
the needs of households managing extremely tight budgets.’

Changing shape: The types of debt reported by callers to the National Debtline have changed considerably since 2007 (Source: Money Advice Trust)

Another wave of debt concerns could have started as young homeowners take on too much debt, a second report has warned this week.

Almost half of young homeowners who relied on extra help to get onto the property ladder are now worried about the level of debt they have taken on, the consumer group the HomeOwner’s Alliance warned.

The poorest households have cut back on expenses that could leave them vulnerable in the future, such as home content insurance (Source: Money Advice Trust)

It found younger property owners were likely to have relied on measures such as mortgage terms of more than 25 years, loans from family and friend or help from the state such as the Help to Buy scheme to buy their home.

But it found just under half of those who had done so (49 per cent) were now worried about the amount of debt they were in.

The UK economy grew by 0.8 per cent in
the first quarter, according to the Bank of England, its fastest annual growth in more than six years. Economists said last week they expected it grow again by 0.8 per cent in the
second quarter, coming back to the levels seen before the financial
crisis in 2008.

Keeping watch: The number of people phoning the National Debtline with TV licence arrears has shot up over the last decade (Source: Money Advice Trust)